STORY: Stocks steadied on Friday (March 17) as fears about a banking collapse calmed down for now.
European banking stocks gained over 1% in early trade, but then fell back by lunchtime.
A day earlier, large U.S. lenders gave a $30 billion lifeline to troubled First Republic Bank.
That soothed fears of a growing crisis, after the earlier collapse of Silicon Valley Bank and Signature Bank and amid fears over European lender Credit Suisse.
A source said the deal was put together by leaders at the U.S. Treasury, Federal Reserve and JPMorgan Chase.
Though the move eased tensions, some market watchers said they wanted to know more.
Thomas Wade is from the American Action Forum think tank:
"By having the largest banks in the US inject liquidity directly into first Republic, we are seeing a route to the bank receiving liquidity outside of the mechanisms of government. So we don't know enough as of yet exactly how the large banks have been encouraged to perform this lifesaving maneuver."
Banking stocks have been battered since Silicon Valley Bank collapsed last week due to bond-related losses.
The rescue package also comes less than a day after Credit Suisse received a central bank loan of up to $54 billion.
Wade worries that the rescues could just encourage banks to take more risks:
"There are a number of reasons why the macroeconomic situation has gone against Silicon Valley and Silvergate and First Republic. But having said that, I'm worried that we're moving to a position where it's no longer "Too Big to Fail" and has somehow become "Too Bank to Fail."
First Republic's stock closed up 10% on news of the rescue, but its shares fell 17% in after-market trading.
That after the bank said it would suspend its dividend and disclosed just how much emergency liquidity it needed.
Analysts say authorities are eager to quickly deal with systemic risks,
Yet they worry the potential for a banking crisis is far from over.